One in every five shoppers regularly stops to check the environmental impact of a product or service before deciding to buy, according to a new report* from Virgin Money.
The company says that around 8.2 million adults (20%) claim they either always take into account how eco-friendly a product is, or do so most of the time when they make a purchasing decision. However, over half the adult population (53%) never stop to check whether what they are buying is eco-friendly.
Examples of how consumers check products for their green credentials include checking the ‘food miles’ of groceries, avoiding products known to have a high carbon footprint and checking the country of origin of clothes and other goods.
And the report also highlights which industries consumers scrutinize most. The findings show that people are most likely to assess the environmental impact of food and groceries, with 35 per cent of people polled claiming they either always or very regularly check the environmental credentials of their groceries before buying.
This was followed closely by cars and electronic goods, with 32 per cent and 27 per cent respectively saying they closely scrutinize a product’s environmental impact.
Virgin Money spokesman Jason Wyer-Smith said: "Everyone is becoming more environmentally aware and that is beginning to have an impact on people’s purchasing decisions. We believe companies can be more successful by being ‘greener’.
"The interesting thing is that people do not apply the same rigour to all products and services – clearly people believe some products are more likely to affect the environment than others. "
The Virgin Money report also asked people to name the company they believed was most environmentally friendly in their respective fields. Tesco was named by the highest proportion of people as the most eco-friendly company of all.
By Sector the company named by most people as the most environmentally friendly, % of population
Food / groceries – Tesco – 22%
Air travel – Virgin Atlantic – 16%
Banking – HSBC – 14%
Internet provider – BT – 14%
Cars – Toyota – 11%
Clothing – Marks & Spencer – 11%
Mobile phones – 02 and Nokia – 11% each
Electronic goods – Sony – 10%
Holidays – Thomson – 10%
Jason Wyer-Smith added: "The way people perceive a company may bear no relation to the carbon footprint it generates when manufacturing, marketing and selling its products and services. However, it is obviously important to consumers to have a sense of whether a company is trying to improve its environmental impact or not."
Virgin Money launched the innovative Virgin Climate Change Fund (VCCF) in January this year. Contrary to traditional ‘green’ funds, the VCCF does not screen out any industries. Instead, the VCCF invests in companies across all sectors, but only those companies that do a better job than their peer group in minimising their environmental footprint. Virgin believes these companies will financially outperform their ‘dirtier’ rivals with the effect being to see the stocks of lighter-footprint companies outperforming those of heavier-footprint companies bringing greater pressure to bear on company management teams to lighten their environmental impact. Virgin believes this benefits the environment in a more tangible way than the traditional approach to ‘green’ investment and benefits investors by delivering a superior return.
The fund is open to people with minimum investments of £50 a month or a £500 lump sum. It is advised by leading asset management firm GLG Partners and aims to deliver market-beating returns for investors.
Environmental data for the fund is provided by leading environmental research organisation Trucost PLC which currently works for institutional investors, companies and government. It wrote the environmental reporting guidelines for the UK Government published in 2006.
* TNS interviewed 1,004 GB adults online between November 20th and 22nd 2007